Iona Technologies will shed a third of its employees over the next few months to cut costs in an attempt to return to profit.

The software firm briefed its staff yesterday on the restructuring plan, which will see about 215 people leave the firm, about 50 more than previously thought.

Iona, which recently suffered a major sales slump and last week announced the departure of its chief executive officer, will employ just 400 employees after the restructuring.

In Dublin, about 60 of the 180 workers at Iona's biggest research and development centre will go. Staff will be offered some sort of redundancy package, although the firm would not reveal full details last night.

The reduction in the workforce follows shortly after Iona's co-founder, Dr Chris Horn, assumed the chief executive position last week, and began a review of the firm's operations.

An Iona spokesman said the company would be a leaner, fitter and more flexible business with a cost-base tailored for the current market, as a result of the restructuring. Iona would still be a big software firm with 400 people, he added. He said the firm would take a $14 million (€12 million) restructuring charge in the second quarter.

In a message to employees yesterday Dr Horn said he wanted the company to move forward aggressively to win in the middleware marketplace and to regain its leadership position. He said the re-focus under way would leave Iona better geared to provide strong customer service and better equipped to seize the opportunities, when an upturn came around again.

Iona, considered one of the Republic's most successful technology firms, has suffered considerably in the current difficult economic climate. It announced its second profit warning in less than a year last month and will post a second consecutive net loss later this year.